Supreme Court case identify issue which may affect Bank of Scotland Ireland distressed mortgages
Ms. Justice Mary Laffoy in her recent ruling in the case of Kavanagh -v- McLoughlin raised an issue in relation to the fact that Bank of Scotland (Ireland) Limited remained the registered owner of charges over mortgaged properties.
Bank of Scotland (Ireland) ceased to exist on 31st December 2010. Bank of Scotland (Ireland) Limited remains the registered owner of many charges with the Property Registration Authority. The only way these charges can be transferred is through an application by the registered owner.
Ms. Justice Laffoy said “I am satisfied that, absent any specific statutory provision relieving Bank of Scotland (the new owner) from the mandatory obligation of becoming registered as owner of the charge in respect of which it wishes to exercise any powers conferred… it must be registered as owner of the relevant charge on the relevant Folio, if it wishes to exercise the statutory powers conferred”.
As the registered owner no longer exists New Beginnings lawyers have suggested that the Laffory judgment raises the possibility that difficulties might arise if Bank of Scotland (Ireland) or their successors attempt to enforce these charges. The Department of Justice has advised that the Property Registration Authority have made amendments in light of the comments and there are no legislative implications in relation thereto.
In the case at hand the point was obiter as Ms. Justice Mary Laffoy held that as a matter of contract Bank of Scotland had powers independent of the provisions of the 1964 Registration of Title Act to appoint the Receiver. In this case the failure to register Bank of Scotland as the new registered owner did not affect the appointment of the Receiver or the enforceability of the charge in this instance.